To seek feedback on the relocation of edited versions of private advice from the Register of Private Binding Rulings (Register) to the ATO Legal database, along with proposed timeframes for archival and deletion of the edited versions.

Description

Edited versions (EVs) of private ATO advice have traditionally been available from the Register. Based on feedback received, they are now available in the ATO Legal database.

Making EVs available in the Legal database:

provides improved search functionality

means EVs are available alongside other advice and guidance products, such as tax determinations and rulings, enabling users to search for EVs and other advice and guidance products in one place.

To ensure that any search results are useful and relevant, EVs on the Legal database have been:

archived if more than four years old (these are still available through a search of archived content)

Consultation has now formally closed, although we welcome any further comments.

We are currently considering comments received. Edited versions of private advice will continue to be published to both platforms (the Register of Binding Advice and the ATO Legal database) until the most appropriate outcome is decided.

Consultation was targeted at small business and tax practitioner association members including:

Small Business Stewardship Group (SBSG)

Tax Practitioner Stewardship Group (TPSG)

BAS Agent Association Group (BASAAG)

CPA Australia

Outcome

The two components of Simpler BAS are Simpler BAS reporting – reducing the number of GST questions on the BAS from 7 to 3 (default position); and Digital bookkeeping solution – option for small businesses to take up changes to their accounting software to reduce the average number of complex GST classifications from 8–9 down to a simple ‘GST’ or ‘No GST’.

Simpler BAS reporting was successfully implemented in full from 1 July 2017. The digital bookkeeping solution is not expected to be available to small business until the second half of 2017–18. In the absence of the digital bookkeeping solution, the feedback from the Q1 Simpler BAS consultation to date highlighted:

concerns that without the full accounting software solution in place Simpler BAS is ‘just another form change’.

On-going Simpler BAS consultation with small business and tax practitioner associations will occur in the second half of 2017–18 to provide progress updates and support the take up of the digital bookkeeping solution.

[201772] Digital service provider operational framework

Purpose

To understand an industry position for each of the key issuesExternal Link and establish implementation timeframes.

Description

The growth of our digital wholesale services increases productivity and community connectivity across the digital economy. This connectivity presents a range of service opportunities, business risks and security implications for the organisation and the Australian community.

The DSP Operational Framework is part of our response to these risks and establishes how we will provide access to, and monitor the digital transfer of data through software.

[201771] Practical approach to trust vesting issues

Purpose

To seek feedback, as part of consultation on Draft Ruling TR 2017/D10 Income tax: Trust Vesting – amending the vesting date and consequences of a trust vesting, on practical issues that may arise where trusts have been administered after their vesting date in a manner that is inconsistent with the trust‘s vesting terms.

Feedback will help inform our administrative approach in such cases, as well as the content and type of further public advice or guidance that we can provide.

Description

Draft Ruling TR 2017/D10 Income tax: Trust Vesting – amending the vesting date and consequences of a trust vesting outlines our view of the general law and taxation consequences of a trust vesting.

Continuing to administer a trust in a way that is not consistent with its vesting terms (either intentionally or inadvertently), or ineffectively extending the trust’s vesting date, can have significant tax and other legal consequences.

We would like to work with trustees as soon as they become aware that the trust’s vesting date has passed. We also intend to provide further advice and guidance to affected trustees and beneficiaries to assist them in managing their tax affairs.

[201769] Major bank levy (MBL)

Purpose

To consult with key stakeholders to progress the implementation of the MBL.

Description

The MBL applies to authorised deposit-taking institutions (ADIs) with a total liability greater than $100 billion for a particular quarter. The affected ADIs have a lodgment/reporting obligation with both the Australian Prudential Regulation Authority (APRA) and the Australian Taxation Office (ATO). The MBL is payable to the ATO. The general administration of the MBL is the responsibility of the Commissioner of Taxation.

Who we consulted

Australian Banking Association

Australian Prudential Regulation Authority

Treasury

Outcome

Consultation has closed and the new measure has been implemented. The consultation process assisted with shaping the way the major bank levy will be administered and has enabled the ATO to provide certainty to the banks on various interpretive and administrative issues.

[201768] APRA fund communication and engagement

Purpose

To co-design with industry, improvements to the way we communicate, engage and collaborate with the APRA fund community.

Description

The ATO needs to look for opportunities to improve its approach to communication, engagement and collaboration with APRA regulated funds. A short term reference group will act as a sounding board to address irritants and co-design improvements.

Through this group we plan to identify principles that can be applied to future communication and engagement activities with APRA regulated funds to ensure information is received and consumed in the best possible way.

This Reference Group will report findings through the Superannuation Administration Stakeholder Group.

Who we consulted

Representatives of the APRA-regulated fund community, including superannuation associations and industry bodies.

Outcome

Heard industry feedback to help identify and co-design strategies to address irritants and improve communication, engagement and collaboration between the superannuation industry and the ATO.

Validated existing communication, engagement and collaboration strategies to confirm their value and assess whether they should become, or continue to be, part of our “business as usual” way of operating.

Identified “quick win” and medium term low touch improvements, and strategic/aspirational improvements that may require investment from ATO and industry.

[201766] TR 2017/D7 Income tax: when does a company carry on a business within the meaning of section 23AA of the Income Tax Rates Act 1986?

Purpose

To seek feedback on draft ruling TR 2017/D7: Income tax: when does a company carry on a business within the meaning of section 23AA of the Income Tax Rates Act 1986?

Description

For 2016–17, small business corporate entities will be taxed at the 27.5% corporate tax rate (rather than the usual 30% corporate tax rate).

To meet the definition of a small business, a corporate entity needs to be:

carrying on a business, and

have an aggregated turnover of less than$10m.

If a corporate entity does not meet either of these criteria they will pay tax at the 30% rate.

On 18 October 2017 the Commissioner published TR 2017/D7 Income tax: when does a company carry on a business within the meaning of section 23AA of the Income Tax Rates Act 1986? This draft ruling provides guidance on when a company is carrying on a business. The draft ruling confirms that it is not possible to definitively state whether a company is carrying on a business. It does however confirm that Limited and No Liability companies are likely to be carrying on a business where they are established and maintained to make a profit for their shareholders, and invest their assets in gainful activities which have both a purpose and prospect of profit.

The draft Ruling addresses whether a company carries on a business in a general way. It does not address the scope or nature of a company's business. This is a separate question that needs to be answered in order to determine the taxation consequences of the transactions a company undertakes, such as whether a gain made is ordinary income or a capital gain, or whether an outgoing or loss is capital in nature.

Early consultation on the draft ruling has highlighted a question about the provision around which the advice should be framed. The draft ruling addresses whether a company is carrying on a business for the purpose of identifying whether it is a base rate entity in section 23AA of the Income Tax Rates Act 1986 (ITRA 1986). This is relevant for determining whether it is subject to the 27.5% or 30% corporate tax rate in the 2017–18 and later income years. The reasoning expressed in the draft ruling is, however, equally applicable to determining whether a company is a small business entity within the meaning of section 23 of the ITRA 1986 and section 328-110 of the Income Tax Assessment Act 1997 (ITAA 1997) for the 2015–16 and 2016–17 income years, and therefore which rate is applicable to it in those income years.

In light of this and the proposed changes to the law, the Commissioner is proposing to finalise the draft ruling in relation to section 23 of the ITRA 1986 and 328-110 of the ITAA 1997, rather than section 23AA of the ITRA 1986 as it is presently drafted.

To seek comments on existing general guidance applying to significant global entities required to give a GPFS where they do not lodge one with the Australian Securities and Investments Commission and in particular relating to:

Significant global entities (broadly, those entities with annual global group income of more than A$1 billion) will soon be required to give a general purpose financial statement (GPFS) to the Commissioner of Taxation. This is if they do not already lodge one with the Australian Securities and Investments Commission (ASIC).

It is estimated that there are approximately 4,000 to 5,000 significant global entities operating in Australia (including publicly listed companies, private companies and non-corporate entities). Only those that do not already lodge a general purpose financial statement with ASIC will be affected.

This measure will help improve public transparency of multinational enterprises with Australian operations and will apply to income years commencing on or after 1 July 2016.

Who we consulted

Consultation was open to the broad community who have a particular interest in the provision of general purpose financial statements by significant global entities.

Outcome

Public guidance was made available in relation to the provision of general purpose financial statements (GPFS). The ATO will review comments received through the public consultation process and discuss with relevant ATO and non-ATO stakeholders the issues raised in the submissions received.

To seek comments on whether to remake legislative instruments that waive the requirement for a taxpayer to hold a tax invoice or adjustment note to claim a GST credit or make a decreasing adjustment following a finding by a Court or Tribunal that a taxpayer has made a creditable acquisition or has a decreasing adjustment in certain circumstances:

The Commissioner is considering whether to remake WTI 2004/1 and WAN 2004/1 that lapsed on 1 April 2017. The Commissioner considers there are convincing reasons not to remake the instruments including that:

there are provisions in the GST legislation that give the Commissioner the discretion to treat another document as a tax invoice or adjustment note. This allows the Commissioner to waive the requirement to hold a tax invoice or adjustment note in appropriate cases where the lack of the tax invoice or adjustment note is not a result of taxpayer’s culpable failure to maintain proper records

legislative changes made in 2010 in relation to tax invoices have diminished the importance of the instruments. Tax invoices missing the requisite information can be made valid if that information is ascertained from other documents from the supplier

a decision not to remake the instruments affirms the importance for taxpayers to hold tax invoices and adjustment notes and maintain proper records when claiming GST credits and making decreasing adjustments.

Who we consulted

We sought comments from the taxpayer community, tax, legal and accounting advisors and representatives from profession bodies and the GST Stewardship Group.

Outcome

Comments received during consultation are being considered. If a decision is made not to remake the legislative instruments, our public advice and guidance material will be updated accordingly.

[201762] Member Account Transaction Service (MATS) technical and business documentation consultation

Purpose

To receive feedback from the wider superannuation industry on the technical and business documentation for the MATS.

Description

The MATS is key element of the APRA fund superannuation reporting transformation, including the redesign of the Member Contribution Statement (MCS). Through the service, ARPA-regulated funds will report member transactions as they happen rather than annually.

Who we consulted

All superannuation industry representatives with an interest in the MATS service were invited to provide feedback on the draft technical documents.

Outcome

The Member Account Transaction Service (MATS) business and technical documentation was available for a two week consultation period to 21 September 2017. Feedback was received and considered. Once consultation closed, the documentation was updated and published to Standard Business Reporting websiteExternal Link and Let’s Talk on 28 September 2017.

[201761] Fringe Benefits Tax – definition of taxi

Purpose

To consider an interpretation of ‘taxi' for fringe benefits tax purposes that includes vehicles licensed to provide taxi services, including rank and hail services, ride-sourcing vehicles and other vehicles for hire.

Description

The ATO is consulting on the definition of ‘taxi’ contained in the Fringe Benefits Tax Assessment Act 1986 (FBT Act) and the exemption from fringe benefits tax for taxi travel taken to or from work or due to illness under section 58Z of the FBT Act.

In light of a recent Federal Court decision in the matter of Uber B.V. v Commissioner of Taxation [2017] FCA 110External Link (Uber), and certain proposed changes to licensing regulations in a number of states and territories, we consider it is appropriate to review our interpretation of the definition of ‘taxi’ contained in the FBT Act.

The FBT Act provides that taxi travel beginning or ending at work or undertaken due to sickness or injury is fringe benefits tax exempt. The exemption is limited to travel in a motor vehicle licensed to operate as a taxi.

[201760] Draft remedial power determination – small business restructure roll-over

Purpose

To seek the views of affected stakeholders on the proposed legislative instrument exercising the Commissioner’s Remedial Power to modify the operation of Section 40-340 of the Income Tax Assessment Act 1997 to address identified deficiencies in the current law.

Description

The Commissioner considers the proposed modification to be reasonable, having regard to the intended purpose or object of subdivision 328-G of the Income Tax Assessment Act 1997 and to whether the cost of complying with the provision is disproportionate to achieving that intended purpose or object.

Under the law as enacted, a business owner proposing a business restructure involving depreciating assets may be exposed to unintended adverse tax consequences. To avoid that outcome, the business owner has the choice of either excluding depreciating assets from the overall restructure or ensuring that depreciating assets are transferred at their market value.

Each of those alternatives limits the utility of the roll-over, increases the cost of undertaking the restructure (for example, by necessitating that market valuations be obtained) and can lead to additional ongoing compliance costs. The proposed modification will increase the utility of the roll-over and will relieve affected businesses from unnecessary compliance costs.

Who we consulted

We consulted the community through publication of the draft determination on the ATO Legal Database.

Outcome

We will make a number of small changes to paragraphs in the Explanatory Statement to better explain the operation of the existing small business restructure rollover and how it is modified by this use of the Commissioner’s Remedial Power, and will add information to summarise the public consultation comments received.

Changes are not necessary to the Legislative Instrument to give effect to the feedback received.

The contribution of the group in providing ideas and views on the work related expenses risk was noted, as was the support prior to and following the release of the individual’s (not-in-business) tax gap to the community.

To set out the ATO's compliance approach to the use of propagation to select assets for disposal and the circumstances where propagation arrangements satisfy the asset identification principles and record keeping methodologies described in CGT Determination Number 33 (TD 33), and Taxation Rulings TR 96/4 and TR 96/7.

Description

We sought industry feedback on the draft practical compliance guideline which assists registrable superannuation entities to examine the characteristics of their propagation arrangements to determine the likelihood of ATO compliance activity.

Who we consulted

Comment was open to APRA-regulated funds and other relevant stakeholders in the community.

Outcome

Two submissions were received as a result of consultation and minor changes have been made to improve clarity of the PCG 2017/D16. It is now expected to be finalised by the end of May 2018.

Contact

Ricardo Coburn, Director – Advice and Guidance, Public Groups and International

To outline the ATO’s position on how SMSFs will report under the new transfer balance cap measure in the 2017–18 year and onwards, and to seek industry feedback in relation to how often SMSFs will be required to report events impacting an individual member’s transfer balance account from 1 July 2018; based on two possible alternative options.

Description

The position paper provides a comprehensive outline of two alternative options in relation to how often SMSFs should report events impacting an individual member’s transfer balance account from 1 July 2018. Specifically, we are seeking feedback in relation to these two options in our position paper.

Who we consulted:

Chartered Accountants Australia and New Zealand (CAANZ)

CPA Australia

SMSF Association

Financial Planning Association

National Tax and Accountants Association (NTAA)

as well as SMSF professionals and advisors, and legal professionals.

Outcome

Over 170 responses were received and an additional 6 submissions from profession associations. The overwhelming response was for Option 2 which stated that SMSFs report all events quarterly, except commutation authorities and commutations after we issue a determination, for a transitional period.

Feedback also highlighted growing concerns about the benefits of events based reporting of transfer balance cap events for SMSFs with members having balances significantly lower than the $1.6 million transfer balance cap. We are therefore giving further consideration to how we can balance administrative ease and efficiency with the need to mitigate the risk of SMSF members being exposed to unexpected and increased excess transfer balance tax liabilities. We are considering possible further transitional relief for SMSFs whose members’ balances are significantly lower than $1.6 million and will be providing further information about our position.

To receive feedback from APRA-regulated funds on a draft legislative instrument OPS 2017/D5 ‘PAYG Withholding Variation: Certain superannuation beneficiaries who have not quoted a tax file number’ and its explanatory statement.

Description

We are seeking industry feedback on our review and update to the legislative instrument that varies the rate of withholding to zero for the non-assessable non-exempt component of superannuation payments, when the payee has not quoted a tax file number.

Who we consulted

We consulted with APRA-regulated funds through the publication of a draft legislative instrument.

Outcome

Comments received during the consultation period have been considered in finalising the legislative instrument.

The draft instrument provides eligible food retailers with the choice to use a simplified accounting method (SAM) to help work out their net amount by estimating their GST-free sales and GST-free acquisitions of trading stock.

This draft instrument is being remade as the existing instrument is due to sunset on 1 October 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

We are reviewing the comments for incorporation in the instrument. The draft instrument has been updated to make it easier to read, but its scope and operation remains substantially the same as the original instrument. It is expected to be registered on the Federal Register of Legislation before 1 October 2017.

[201753] Downsizer contributions to superannuation

In the 2017 Federal BudgetExternal Link the Government announced that from 1 July 2018, individuals aged 65 or over will be able to make a contribution to super of up to $300,000 from the proceeds of selling their home.

Discussions will consider:

administrative design

reporting requirements

law companion rulings

other specific implementation issues

to enable a thorough understanding of the issues to ensure the design and implementation supports the measure.

Participants played an important role in helping us shape the administration for this measure; in particular the constructive feedback received on the Law Companion Ruling, Guidance note and the Downsizing Form.

We acknowledge Industry’s and the consultation group's commitment and participation in the development and user testing of the ATO Online Portal reporting solution ensuring we were well placed for the commencement of the measure on 1 July 2018.

Participants played an important role in helping shape the administration for this measure; in particular the constructive feedback received on the Law Companion Ruling, Guidance Note, the external Fact Sheet and FHSSS forms.

We acknowledge the commitment and participation by Industry and our consultation group in the development of our administrative approaches ensuring we were well placed for the commencement of the measure on 1 July 2018.

This Legislative Instrument sets out the method to calculate the market value of valuable metal for the purposes of working out whether the market value of a taxable supply exceeds the valuable metal threshold.

Description

Division 86 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) which received Royal Assent in June 2017 requires that, under certain circumstances, the GST on a taxable supply of goods consisting wholly or partly of gold, silver or platinum is “reverse charged” so that the recipient of the supply is liable for the GST on the supply instead of the supplier.

However if the market value of the supply of goods exceeds the market value of any valuable metal contained in the goods by 10 percent or more at the time of the supply, the reverse charge may not apply. In these circumstances the supplier and the recipient can agree to voluntarily reverse charge the supply to avoid having to undertake the market value calculation.

The definition of “second-hand goods” in section 195-1 of the GST Act excludes goods to the extent that they consist of gold, silver or platinum unless the goods are “incidental valuable metal goods”. This term is defined in section 195-1 to include goods where the market value of the goods exceeds the market value of any valuable metal contained in the goods by 10 percent or more at the time of the acquisition.

In this instrument, the Commissioner sets out the method taxpayers must use to calculate the market value of valuable metal for the purposes of the valuable metal threshold test.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database in addition to the targeted consultation.

Outcome

Comments received during the consultation period have been considered in making the legislative instrument.

1(e) The ATO consult with stakeholders on updating the Charter and in particular consider the following:

i) the need to include any higher standards set by the ‘Reinvention Program’;

ii) its application to digital interactions, tax practitioners when acting as agents or in their personal capacities and the interaction between taxpayers and any external services providers engaged by the ATO;

iii) the impact of any recent law changes or evolution in tax administration and whether any additional or existing ‘rights’ should be incorporated;

iv) the need for a clear statement that Charter ‘rights’ are not contingent on taxpayers discharging their ‘obligations’; and

v) the most effective way of presenting the Charter, such as a single page summary of all ‘rights’ and ‘obligations’ with links to further information.

We are committed to ensuring the Charter remains contemporary and reflects ATO clients and stakeholders expectations when dealing with us.

Who we consulted

We consulted broadly with the community via Let’s Talk as well as through the ATO’s stewardship groups.

Outcome

We conferred with stewardship groups about the results and outcomes from the initial round of consultation. We are using the feedback received from this process to shape the content and manner in which the Charter will be updated over the remainder of the 2018 calendar year.

The amendments clarify that goods, to the extent that they consist of a valuable metal (gold, silver or platinum) are generally not eligible to be treated as second-hand goods. This means that such goods are not eligible to attract input tax credits under Division 66 of the GST Act.

This change applies to acquisitions of second-hand goods that occur on or after 1 April 2017.

The change is designed to remove the opportunity for an entity to change the form of a precious metal to exploit the different tax treatment available for second-hand goods.

However, without special rules, a range of goods would be inappropriately excluded from the second-hand goods definition. These are goods which contain valuable metal but are properly characterised as consisting of the value-added product, rather than the constituent metal. Examples of such goods may include a piece of electronic equipment, antique jewellery, a prestige brand gold watch or a collector’s edition proof coin.

Who we consulted

Feedback was open to the community through the discussion paper on ato.gov.au.

Outcome

Comments closed on 18 August 2017 on a discussion paper that was made available for comment.

Comments were received, including suggestions for further advice products that might be developed. If it is decided to proceed with further public advice and guidance, that would be published in draft form to allow further consultation.

[201747] Draft PCG 2017/D16: Fixed entitlements and fixed trusts

Purpose

To ensure the Practical Compliance Guide (PCG) provides greater guidance on how the Commissioner will administer the fixed entitlement rules in section 272-5 of Schedule 2F to the ITAA 1936. The concept of ‘fixed entitlement’ and ‘fixed trust’ is central to the trust loss provisions, as well as other tax provisions.

Description

The re-drafted PCG provides a stepped process to assist taxpayers to determine whether they satisfy the fixed entitlement requirements. Additionally,

the operation of the savings rule has been clarified

there is greater guidance on the factors the Commissioner will have regard to when deciding whether to exercise the discretion in section 272-5(3), including more detailed examples

safe harbours have been developed for certain trusts with low risk circumstances so that they can manage their tax affairs with greater certainty.

Who we consulted

Financial Services Council

Property Council of Australia,

Chartered Accountants Australian and New Zealand

CPA Australia

The Tax Institute

Tax and Super Australia

Institute of Public Accountants

advisory firms and other stakeholders.

Outcome

Draft Practical Compliance Guide PCG 2016/D16 – Fixed Trusts (first published on 26 October 2016) has been rewritten in response to comments received during the public consultation period and is being finalised for early August 2017 publishing.

To identify and address any concerns associated with the ATO’s approach to taxation issues associated with cross-border related party financing arrangements and related transactions.

Description

Draft PCG 2017/D4 sets out the ATO’s compliance approach to the taxation outcomes associated with a ‘financing arrangement’. It also serves as a self-assessment framework under which taxpayers can assess the tax risk associated with a related party financing arrangement.

We are seeking input in respect of:

The impact of the ATO’s compliance approach/transitioning arrangements

The nature, scope and application of the risk assessment framework

Other aspects of the draft PCG that require further guidance or clarification.

[201745] Effective life review of assets

To determine the effective life of assets used in the following industries:

spirit manufacturing

mining support services – oil and gas

wholesale trade (multiple industries) [now delayed to 2018–19]

fruit and vegetable processing – jam and dried fruit

scientific testing and analysis services

dairy product manufacturing (butter and ice cream manufacturing).

Description

Under section 40-100 of the Income Tax Assessment Act 1997 the Commissioner may make determinations of the effective life of depreciating assets. The determinations will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2017/2.

The draft effective lives determinations will be referred to an independent review panel to be held in May 2018. The review panel checks the review process to confirm that the level of industry consultation was appropriate. If approved, the effective life determinations are expected to apply to assets purchased on or after 1 July 2018.

Who we are consulting

Various profession associations, industry associations, businesses, suppliers, manufacturers and repairers of assets used in these industries.

Outcome

The draft effective lives determinations will be referred to an independent review panel to be held on 16 May 2018. The review panel checks the review process and confirms that the level of industry consultation was appropriate. If approved, the effective life determinations will be expected to apply to assets purchased on or after 1 July 2018.

[201744] Trust splitting arrangements

Purpose

To seek feedback on the ATO’s preliminary views on whether implementing a trust splitting arrangement will cause CGT event E1 to happen. Feedback provided will be taken into account before issuing the draft Taxation Determination for broader consultation.

Description

The ATO was asked to consider providing public advice and guidance on trust spitting arrangements and whether they result in the creation of a new trust and have other tax implications.

A draft Taxation Determination has been prepared that addresses the question of whether a trust splitting arrangement of the kind described in the draft TD causes CGT event E1 to happen.

A ‘trust split’ refers to an arrangement where the parties to an existing trust functionally split the operation of the trust so that some trust assets are controlled by and held for the benefit of one class of beneficiaries, and other trust assets are controlled and held for the benefit of others.

We have received feedback from our consultation stakeholders and are taking it into account in refining a draft Taxation Determination before publication. To keep updated on the progress of that draft Taxation Determination, please refer to the Advice Under Development Program – income tax issues.

[201743] Rewards for surveys / participation

This matter was actioned through other processes. The ATO contacted the submitter and

referred them to existing information

advised current web content would be reviewed.

[201742] GST and customer owned banking institutions

Purpose

The purpose and intent of the proposed approach is to remove the complexity and minimise compliance costs for customer owned banking institutions.

Under the proposed approach the Commissioner will accept, as a matter of practical administration that the extent of the creditable purpose for all of the partly creditable acquisitions made by customer owned banking institutions is 18%.

Description

The proposed approach only applies to entities that are customer owned banking institutions. Given the specific circumstances of the customer owned banking sector, we acknowledge that customer owned banking institutions may experience difficulties in meeting the requirements of the GST law in the context of apportionment of their partly creditable acquisitions.

The ATO is conscious of administration costs associated with seeking assurance of apportionment methods and in particular consideration of the customer owned banking institutions’ design, maintenance and use of apportionment methodologies.

Who we consulted

A discussion paper was available to the broader community and was provided to targeted entities.

Outcome

We are finalising a Practical Compliance Guideline and aiming to publish in early July 2017 to communicate our proposed approach to the customer owned banking industry.

[201741] Compulsory superannuation payments made from short-term employment for Centrelink payment recipients without a superannuation account.

Outcome

This matter was actioned through other processes. The ATO contacted the submitter and provided existing advice to assist.

[201740] Layered approach to access advice and guidance – version history

Purpose

To seek comments on proposals to identify changes to ato.gov.au content as a consequence of law change, change in ATO view, inclusion of additional information or removal of content.

Description

To make it easier to find information we are trialling on ATO Beta new ways to navigate on ato.gov.au to different layers of information in the Legal Database. The layered approach will provide a more seamless delivery of advice to help users understand their rights and obligations.

As part of this layered approach, we are making it easier for users to confirm the currency of our content and see how the content has changed over time. Content or version history drop down menus are being added as a way of managing version control on our website, detailing when changes have been made and whether they were minor, major, or legislative in nature.

Who we consulted

We consulted broadly with the community through the publication of a consultation paper for comment via Let’s TalkExternal Link on the ATO's website.

Outcome

Consultation closed on 28th April 2017. The feedback we received from consultation will be considered in implementing version history on ato.gov.au to make it easier to confirm the currency of our content and see how the content has changed over time. Content or version history drop down menus are being added as a way of managing version control on our website, detailing when changes have been made and whether they were minor, major, or legislative in nature.

[201739] Streamlined registration for not-for-profits

To improve the current end-to-end registration process for not-for profit organisations.

Description

This consultation is contributing to the high-level design for a streamlined registration for not-for-profits (NFPs) and charities process including online forms.

We are seeking to understand the current experience for NFPs and intermediaries with NFP clients when they register an NFP organisation and seek access to tax concessions through the ATO. ATO staff assisting these clients are also being consulted.

Consultation occurred through client and staff interviews, and a workshop with clients, intermediaries and government agency staff.

Who we consulted

Representatives from NFP organisations that are new entrants to the tax and super systems;

NFP intermediaries and NFPs providing advice and assistance to NFPs;

Government representatives from ACNC, ASIC, and state government agencies that service NFPs.

Outcome

The information from the consultation will be considered as part of formulating the high level design to improve the current end-to-end registration process for NFPs.

[201738] Division 83A – Employee Share Schemes

Purpose

To shape the ATO’s public guidance on the tax treatment of employee share scheme arrangements.

Description

Feedback from stakeholders indicates there would be value in consolidating our existing ATO guidance on employee share schemes (currently found in rulings, ATOIDs and web content) into a stand-alone product (such as a public ruling).

We are seeking input from the community on how to best structure our public advice and guidance on employee share scheme arrangements, including any additional issues requiring guidance or clarification.

Who we consulted

Representatives of tax and accounting professional associations and relevant industry bodies including:

Employee Ownership Australia

The Tax Institute

Law Council of Australia

CPA Australia

Smart Equity

as well as broad community feedback.

Outcome

Valuable feedback was received from this consultation and is being used to design and develop public advice and guidance specifically tailored to community needs.

[201737] Remaking of legislative instrument to exempt classes of government related entities from taxable payments reporting

Purpose

This legislative instrument is required to replace an existing legislative instrument to clarify intent and to add a new class of exempt government related entity.

Description

This legislative instrument is to outline classes of government related entities that the Commissioner has determined are exempt from providing taxable payments annual reports.

An unintended consequence of the current legislative instrument excludes certain classes of government entities that should be reporting, from the reporting requirement.

The remaking of the legislative instrument provides more clarity for Commonwealth, State and Territory government entities regarding classes of government entities who are exempt from reporting.

The purpose of consultation is to raise awareness with impacted government entities and to provide them with an opportunity to have input into the new legislative instrument.

The draft proposed replacement legislative instrument and explanatory statement can be obtained by writing to tparGov@ato.gov.au.

Who we consulted

We consulted directly with:

Commonwealth Federal government departments

State and Territory, Education departments

State and Territory, Tax and Finance departments

We also consulted via known government forums:

Commonwealth CFO forum

States &Territories Industry Partnership forum

Commonwealth Tax Managers forum

Outcome

The ATO considered all issues raised by government entities in preparing the final draft of the legislative instrument. The majority of the feedback received sought clarification about the application of the legislative instrument to specific circumstances and the ATO provided that clarification directly.

This Legislative Instrument is required to replace A New Tax System (Goods and Services Tax) Act 1999 Waiver to hold an Adjustment Note for a Decreasing Adjustment Determination 2000 – MEMBERS of MASTERCARD INTERNATIONAL and VISA INTERNATIONAL due to sunset on 1 April 2017.

Description

The determination waives the requirement to hold an adjustment note for a decreasing adjustment that relates to the acquisition of bank interchange services where details of the adjustment are detailed on a bank interchange services report that satisfies the information requirements detailed in this determination.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

This determination sets out how to attribute GST or input tax credits where the total consideration is not known because ascertainment of that total consideration depends on a future event or events not within the control of the suppliers.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

The determination waives the requirement to hold a tax invoice before being able to attribute input tax credits for a member that acquires bank interchange services provided the member holds a bank interchange services report that satisfies certain information requirements.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

[201733] Tax debt transparency measure

In the 2016–17 Mid-Year Economic and Fiscal Outlook, the Government announced a Tax Debt Transparency MeasureExternal Link that from 1 July 2017 the ATO will be able to disclose to credit reporting bureaus the tax debt information of businesses that have not effectively engaged with the ATO to manage these debts.

The ATO will report tax debt information for taxpayers with an Australian business number (ABN) where the debt balance exceeds $10,000 for at least 90 days and the taxpayer is not effectively engaged. The ATO will have discretion to disclose tax debt information to credit reporting bureaus; the measure does not oblige the ATO to disclose this information.

While the specific circumstances and exceptions for disclosure will be confirmed through the consultation and design process, tax debts can be reported where the debt balance:

is greater than$10,000 for at least 90 days

relates to a taxpayer with a ABN (including individuals operating a business)

[201732] Suggestions for administrative safe harbours

To seek community input on areas where the ATO should consider providing administrative safe harbours.

Description

A 'safe harbour' may be described as conduct that is taken to comply with a rule or law. Safe harbours represent practical approaches to complying with a statutory provision.

In appropriate circumstances, the Commissioner may make sensible resource allocation decisions consistently with safe harbour approaches and express those approaches in practical compliance guidelines (PCGs) which are available on the Legal database.

Safe harbours can provide certainty and compliance savings for taxpayers in the face of provisions that are otherwise uncertain in their application or impose unexpectedly heavy compliance cost burdens. Safe harbours are not mandatory. A taxpayer may choose whether to use a safe harbour.

Who we consulted

We are seeking broad community feedback on areas where we could consider providing safe harbours.

This Legislative Instrument is required to replace A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 7) 2001 due to sunset on 1 April 2017.

Description

In accordance with the determination, a recipient of a taxable supply of copyrighted material may issue a recipient created tax invoice for the taxable supply if the entity satisfies certain conditions.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

This Legislative Instrument is required to replace A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 7) 2000 due to sunset on 1 April 2017.

Description

In accordance with the determination, a greyhound racing club that is a recipient of a taxable supply of greyhounds for racing may issue a Recipient Created Tax Invoice for the taxable supply if certain conditions are met.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

This Legislative Instrument is required to replace A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 49) 2000 due to sunset on 1 April 2017.

Description

In accordance with the determination, a recipient of a taxable supply of a defined commission and/or fee based service supplied by an entity including a financial supply facilitator may issue a Recipient Created Tax Invoice in certain circumstances.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

This Legislative Instrument is required to replace A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 15) 2000 due to sunset on 1 April 2017.

Description

In accordance with the determination, a caravan park operator that is a recipient of a taxable supply of caravan park management services may issue a Recipient Created Tax Invoices for the taxable supply if the caravan park operator meets certain conditions.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

This Legislative Instrument is required to replace A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 1A) 2000 due to sunset on 1 April 2017.

Description

In accordance with the determination, a horseracing club that is a recipient of a taxable supply of jockey riding services may issue a recipient created tax invoice for the taxable supply if the horseracing club meets certain conditions.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

The determination provides a rule for the attribution of GST payable on supplies of gas and electricity made by public utility providers that have payment arrangements in place with their customers and account on a non-cash basis.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

The determination provides a rule for the attribution of GST payable on supplies of gas and electricity made by public utility providers that have payment arrangements in place with their customers and account on a non-cash basis.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

The determination provides rules for attribution of GST and input tax credits where you make a taxable supply or creditable acquisition that is subject to a statutory cooling off period under an Australian law.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

This determination waives the requirement to hold a tax invoice under subsection 29-10(3) of the GST Act for an entity that makes a creditable acquisition of an intangible supply that is a taxable supply under section 84-5 of the GST Act.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

This determination sets out special attribution rules for entities that report on a non-cash basis. These circumstances involve a taxable supply or creditable acquisition made under a contract that provides for retention of some or all of the consideration until certain conditions are met.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

The purpose of the determination is to set out the circumstances in which the requirement for a tax invoice under subsection 29-10(3) of the Act does not apply in instances where there has been a decision made by a Court or Tribunal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

The effect of the determination is that a Custom Service Leasing customer will be able to attribute their input tax credit to a tax period without holding a tax invoice provided the customer holds an expense report issued by Custom Service Leasing Pty Ltd that contains the information as set out in the determination.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

The determination waives the requirement to hold an adjustment note for a decreasing adjustment if it relates to a taxable supply where a member of MasterCard international and/or Visa International holds a document that meets the information requirements prescribed in the determination.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

The purpose of the determination is to outline three classes of recipients of taxable supplies that the Commissioner has determined may issue recipient created tax invoices (RCTIs) to the supplier of the taxable supply. The Commissioner makes the determination by taking into account a number of factors including the type of industry, the taxable supply, GST turnover of the recipient and certain requirements for issuing RCTIs. The factors reflect a balance between facilitating the practical use of RCTIs by businesses and maintaining the integrity of the GST system.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

The purpose of this determination is to outline the class of tax invoices that may be issued by the recipients of a taxable supply of Demand Side Response (DSR), referred to as DSR aggregators, from registered wholesale electricity markets. DSR refers to the measures taken by electricity consumers to reduce the consumption of electricity from the electricity network at peak times that produces substantial savings to the electricity retailers and network service providers.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

In accordance with the determination, a quarry operator that is a recipient of a taxable supply may issue a Recipient Created Tax Invoices for the taxable supply of the transport of the quarry products where certain conditions are met.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

The purpose of the determination is to outline a class of tax invoices (called RCTIs) that the Commissioner has determined may be issued by recipients of taxable supplies. The Commissioner makes the determination by taking into account a number of factors including the type of industry, the taxable supply, GST turnover of the recipient and certain requirements for issuing RCTIs. The factors reflect a balance between facilitating the practical use of RCTIs by businesses and maintaining the integrity of the GST system.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through the publication of the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

To seek feedback on the content of the ATO view on the central management and control test of residency (TR 2017/D2 replacing TR 2004/15) and the new format adopted for that public ruling.

Description

Following the decision in Bywater Investments Limited & Ors v Commissioner of Taxation; Hua Wang Bank Berhad v Commissioner of Taxation [2016] HCA 45; 2016 ATC 20-589 the Commissioner has formed the view that the position expressed in former TR 2004/15 on when a company carries on business in Australia can no longer be sustained. At [57] the majority of the High Court rejected the contention that to be a resident of Australia, a company must have its central management and control in Australia and in addition it must also carry on its business operations in Australia. Therefore, if a company carries on business and has its central management and control in Australia, it will necessarily carry on business in Australia. That is so even when the only business carried on in Australia consists of that central management and control, and its trading operations are conducted outside Australia.

TR 2017/D2 adopts a more contemporary approach to how we provide an ATO view, and includes updated guidance on applying the central management and control test more generally.

The draft ruling incorporates a number of changes from the standard ATO rulings template with the intent of providing more practical and streamlined advice. The ruling sets out the Commissioner's view as to the principles relevant to applying the central management and control test of residency, and does not include any examples or an explanation section. A Practical Compliance Guideline may be developed.

Who we consulted

Consultation was open to the community.

Outcome

Comments and feedback received on the draft ruling are currently being considered.

[201708] GST and non-commercial rules – benchmark market values

Accommodation supplied by an endorsed charity or gift-deductible entity is GST-free if the consideration received for the accommodation is less than 75% of market value including GST.

The weekly accommodation rates in GST and non-commercial rules – benchmark market values – Table 5 are provided to assist those in the industry by relieving the administrative costs associated with obtaining independent market valuations and are one option that may be used to determine the GST status of supplies of long term accommodation.

We are undertaking consultation to ensure we are providing benchmarks that are relevant, timely and a reliable reflection of the market values.

To seek comments on a draft legislative instrument to replace A New Tax system (Goods and Services Tax) Waiver of Requirement to hold an Adjustment Note for a Decreasing Adjustment Determination 2000 (F2006B11575) due to sunset on 1 April 2017.

Description

The determination waives the requirement to hold an adjustment note for a decreasing adjustment where an entity has a decreasing adjustment that arises from an adjustment event that relates to an intangible supply from offshore that is a taxable supply under section 84-5 of the GST Act.

This determination is being remade as the existing instrument is due to sunset on 1 April 2017. Changes to the existing instrument are minimal.

Who we consulted

We consulted broadly with the community through publishing the draft legislative instrument on the ATO Legal Database.

Outcome

Comments received during the consultation period have been considered in remaking the legislative instrument.

These legislative instruments are required to replace existing legislative instruments which are due to sunset on 1 April 2017.

Description

The purpose of these determinations is to outline a class of tax invoices (called recipient created tax invoices or RCTIs) that the Commissioner has determined may be issued by GST registered recipients of taxable supplies. The Commissioner makes the determination by taking into account a number of factors including the type of industry, the taxable supply, GST turnover of the recipient and certain requirements for issuing RCTIs. The factors reflect a balance between facilitating the practical use of RCTIs by businesses and maintaining the integrity of the GST system.

This determination is being remade as the existing instrument is due to sunset on 1 April. Changes to the existing instrument are minimal.

[201704] Post incident review of service outages

To gather stakeholder experiences, feedback and ideas for improving the ATO’s approaches to managing unplanned service outages to contribute to a post incident review of the recent service outages.

Description

This review is being conducted by an internal review team from our Risk and Assurance group.

We acknowledge that the service outages resulted in adverse impacts for our clients and intermediaries, and we are eager to understand ways we can work in the future to reduce impacts across the system.

These recent events have provided us with an opportunity to reconsider our approach to business continuity and crisis management, from a whole-of-system perspective.

[201703] Income tax and GST on financial assistance payments and levies in the point to point transport industry

Purpose

To provide the states and territories and point to point transport industry participants with certainty in respect of the income tax and goods and services tax (GST) consequences of their financial assistance payments and levies for industry participants and the community generally.

Description

The ATO has been approached by some states and territories authorities about proposed or implemented financial assistance payment schemes and related levies in the point-to-point transport industry, including the taxi and limousine industry (taxi industry).

The aim is to publish appropriate guidance and/or issuing advice on the application of the Income Tax Assessment Act 1997 and the A New Tax System (Goods and Services Tax) Act 1999 to the assistance payment and levy in each state and territory.

Who we consulted

The taxi councils of New South Wales, South Australia and Victoria.

Transport authorities/departments of New South Wales, Northern Territory, Queensland, South Australia, Victoria and Western Australia.

Outcome

The process allowed stakeholders to frame industry changes having regard to the taxation consequences. Web content is being updated.

Specific advice and guidance will be provided as state or territory legislation is enacted.

unpaid present entitlements (UPE) owing from a trust to a private company in the same family group where the trustee holds the funds representing the UPE on sub-trust for the sole benefit of the private company beneficiary, and

that sub-trust has come about because the funds were invested in the main trust using the “Option 1” safe harbour outlined in PS LA 2010/4 – that is, the funds representing the UPE were invested as an interest only 7-year loan (see paragraphs 40 to 58, and 62 to 73 of the practice statement).

Description

Practice Statement PS LA 2010/4 contains practical guidance on the potential consequences for unpaid trust entitlements under Division 7A of the Income Tax Assessment Act 1936. It includes three safe-harbour investment options, in relation to which the ATO accepts that Division 7A will not apply.

Each of the investment options requires the UPE amount to be held in a sub-trust for the sole benefit of the private company beneficiary.

The first two options require an interest only loan with repayment of the principal amount at the end of the term (7 and 10 years respectively). The third option allows for investment in an asset.

Investments falling into this “Option 1” safe harbour are likely to mature in the income year ending 30 June 2018, although there may be some that may mature in the income year ending 30 June 2017.

The ATO is conscious of the time sensitivity for taxpayers who have availed themselves of this “Option 1” safe harbour and expects to complete this consultation process in March 2017.

Who we consulted

We consulted relevant Stewardship groups, targeted professional associations and key advisors identified to have an interest or specialisation in Division 7A matters.

Outcome

Consultation has concluded, during which we received useful feedback on aspects of these arrangements and how we may support the community where these arrangements will mature in the 2017 and 2018 income years.

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If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

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If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.